By Alex Sirois
Publication Date: 2026-10-19 11:15:00
NVIDIA keeps beating earnings forecasts while its stock barely moves, and the reason why reveals a financing arrangement even management admits looks circular. The next two quarters will determine whether the AI trade holds together or quietly unravels.
NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) trades at $214.13. The business keeps beating forecasts, but the stock now carries enough valuation and narrative risk that the next few quarters need to resolve.
NVIDIA sells the GPUs, networking and software that power AI data centers. Data Center revenue reached $89.02B last quarter, up 117%, and the company is worth about $5.17 trillion. Shares fell 6.61% over the past week while the S&P 500 slid 1.97%.
Revenue Doubling at 25x Forward Earnings Looks Cheap
Revenue of $96.22B rose 105.8%, and EPS of $2.22 beat the $2.09 consensus, a sixth straight beat. Guidance calls for $108.0B next quarter, and management expects “to grow revenue by approximately 70% in fiscal 2028. This is a supply-constrained outlook.”
Yet the stock trades at a forward P/E of 25 with a PEG of 0.479. The fiscal 2028 EPS estimate rose from $12.7636 to $15.9146 in 90 days. Vera Rubin lifts revenue opportunity to $40 billion per gigawatt.
Circular Financing and Margin Compression Threaten the AI Story
NVIDIA increasingly funds its own demand. It carries $108.5B in guarantee obligations, has invested nearly 50 billion in frontier AI labs and expects balance-sheet-supported labs to drive roughly a quarter…
